Tax season is done. Now what?
Thank you for getting through another extension season with us. The October 15 deadline has passed, and now is the best time to plan for 2026 before the year ends.
Buying the LLC instead of the building (Part 2)
Part 1 ran in our first issue: a building inside an LLC keeps the seller's old tax basis. Part 2 uses made-up numbers to show the gap between what the buyers paid and what the LLC's books say, and how a 754 election steps up the basis for the buyers.
Read Part 2: the 754 election step-up100% bonus depreciation, and what it covers.
For qualifying property acquired and placed in service after January 19, 2025, the federal deduction can be 100% in the first year. For real estate, that usually means shorter-life components found in a cost segregation study, not the whole building. California does not allow federal bonus depreciation.
Read what real estate owners should knowThe SALT cap is $40,400 for 2026.
The federal cap on state and local tax deductions went up, with a phaseout that starts at $505,000 of modified AGI for 2026. It only helps if you itemize, and it is a deduction, not a credit.
Read what the SALT cap means in CaliforniaThe QBI deduction is now permanent.
The deduction of up to 20% of qualified business income no longer expires after 2025. Income limits still apply, and California does not allow it, so federal and California estimates need to be done separately.
Read what changes for 2026Paid on time and still got an FTB penalty?
California expects estimated tax during the year, on a 30%, 40%, 0%, 30% schedule. A safe harbor, an exception, or a reasonable cause waiver may apply, and Form 5805 is used to figure the penalty.
Read how to request reliefDates to know through early December
Note: Deadlines as of the send date, October 20, 2026. Dates can change, so check current dates before you rely on them.
- Mon, Nov 2: Q3 payroll returns due: federal Form 941 and California DE 9/DE 9C (Oct 31 falls on a Saturday). Employers.
- Mon, Nov 2: Q3 California sales and use tax return due for quarterly filers (Oct 31 is a Saturday). Businesses with a seller's permit.
- Mon, Nov 2: First installment of LA County secured property tax is due (Nov 1 is a Sunday). No penalty until after Dec 10. Property owners.
- Tue, Nov 10: Employees report October tips of $20 or more to their employer. Tipped employees.
- Mon, Nov 16: Monthly payroll tax deposit for October (Nov 15 is a Sunday). Employers who deposit monthly.
- Thu, Dec 10: Last day to pay LA County first installment without a 10% penalty. Property owners.
Dates already reflect weekend shifts. Not sure which ones apply to you? Reply and ask.
What clients say
Some of you took the time to review us on Google. Here are a few, word for word. Thank you.
Shawn was excellent to work with on a complex real estate transaction involving a number of tax and financial considerations.
He was extremely responsive, knowledgeable, practical, and very easy to collaborate with.
He did a great job helping us work through the tax implications of the transaction, explaining the issues clearly, and coordinating with the attorney and the rest of the team so that the tax treatment and transaction documents stayed aligned.
I especially appreciated how accessible and responsive he was throughout the process. He was a real asset to the team, and I would definitely work with him again and recommend him to others.
I highly recommend filing taxes with this CPA. Mr. Lavi is very efficient and communicative with his clients and I always appreciate his guidance. 10/10 quality.
Shawn is great, he helped me save a lot of money on taxes. He's always diligent, organized and timely. Highly recommend.
If one of these is your situation, send us a note. We'll look at your actual numbers.
Shawn Lavi, CPA
Elias Aziz Lavi CPA
Not tax advice. This newsletter is shown as sent on Tuesday, October 20, 2026, lightly adapted for the web. Rules, amounts, and dates may have changed since then. It is general information, not advice for your situation.